Bullish on SushiSwap? The reason starting from whales and products is these SushiSwap, Uniswap
The strategy of SushiSwap, an AMM automated market maker and token exchange platform, to rapidly expand its product offerings seems to be paying off. In the past seven days, it has seen a 22% increase in value, ranking it 37th in market capitalization, a significant rise from when its token, SUSHI, was valued below one dollar back in November. Despite the leading AMM Uniswap holding the 14th spot in market capitalization, SushiSwap's rapid product development and collaborations have earned it a solid position in the market. Regarding the token's growth, the new lead developer, Maki, expressed gratitude for everyone's efforts.
For those unfamiliar with SushiSwap, it might be helpful to understand concepts like liquidity pools and vampire attacks. In essence, there is competition in the decentralized exchange market beyond Uniswap, with another player called SushiSwap expanding its business.
We have compiled the possible impact of SUSHI whales and major holders on the platform, as well as an overview of its new product lineup.
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I don't usually talk price but some perspective on why I've dedicated myself entirely to @SushiSwap after the "incident", we are approaching ATH but this wouldn't have been possible because of many many persons.
I'd like to highlight one conv. I had with @mickhagen
— 0xMaki ⌐◨-◨ (@0xMaki) January 25, 2021
Table of Contents
Will Whale Growth Help Boost Token Prices?
Despite two significant pullbacks in early and late January affecting all DeFi tokens, their prices quickly recovered and broke new highs, which is a common phenomenon among the top fifty DeFi tokens by market capitalization. According to media analysis, data from Santiment shows that in the past two weeks, addresses holding over one hundred thousand SUSHI tokens increased significantly by 74%, with one hundred thousand SUSHI valued at approximately 860,000 US dollars. This trend is interpreted as whales acquiring SUSHI in large quantities during downturns, leading to price increases. The concentration of chips and the interest of whales in SUSHI may further drive up token prices.
SushiSwap Strategy: Products and Partnerships
SushiSwap falls short in many aspects compared to Uniswap, such as token diversity, liquidity, and trading volume. To attract more liquidity, the DeFi team has incorporated it into their ecosystem, and liquidity mining has become its main strategy. However, to emphasize "profit," SushiSwap's products appear more like a "liquidity mining" platform, with the interface for swapping coins not as intuitive.
Nevertheless, SushiSwap's product lineup is more ambitious, not merely acting as a coin swapping platform like Uniswap. SushiSwap aims to expand "liquidity mining" by adding liquidity pools for many emerging popular DeFi protocols such as RUNE, COMBO, FRAX, MIC, and BAC, as well as the Onsen hot spring pool where users can stake liquidity tokens from external protocols to earn SUSHI rewards. There is also a profit-sharing mechanism for liquidity providers, allowing you to stake SUSHI tokens in the Sushi Bar to share a portion of the fee revenue from all liquidity pools. Additionally, its interface design is clear and user-friendly, with continuous updates.
Moreover, its lending protocol BentoBox is a highly anticipated new product. As part of the Yearn ecosystem, SushiSwap, which is also allocated by Yearn founder Andre Cronje to create a one-stop DeFi platform DeriSwap, will cover trading, options, futures, and lending markets in the future.
As various DeFi platforms compete for digital assets on the chain, the fragmented use cases also lead to the issue of idle assets. Therefore, "capital efficiency" has always been a challenge for DeFi to attract users and generate profits, and SushiSwap is progressing towards this goal.
In SushiSwap's 2021 roadmap, integration with the hot Polkadot ecosystem in the second quarter may be another selling point.
However, liquidity mining has always been a double-edged sword. Whether SushiSwap can build a larger user base and trading volume relying on rewards, effectively control the circulation of SUSHI tokens, and prevent token prices from being dumped by whales will be key challenges for SushiSwap.